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Dems' new gas-pump villain: Speculators

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“Oil speculators are making money by betting against the American consumers at the pump,” House Speaker Nancy Pelosi (D-Calif.) said before the Independence Day recess.
Jay Premack

House Democratic leaders intended to bring a bill to the floor before the weeklong Fourth of July recess that would have cracked down on “excessive” speculation. It was supposed to be included in a package that would have helped members of the majority beat back GOP calls for more drilling. But the Democrats’ rank and file proved to be a stumbling block because lawmakers could not agree on the substance of that legislation. The House eventually approved a scaled-back measure and will take another crack at the issue this month.

During the wrangling last month, Pelosi stepped in to broker a partial truce by assuring Agriculture Committee Chairman Collin Peterson (D-Minn.) that he would maintain jurisdiction over any bill the House takes up, members and aides familiar with those conversations said. But that procedural development could present a roadblock for lawmakers pushing Congress to be more aggressive, as Peterson remains skeptical about the impact commodity traders have had on prices.

Democrats who favor a federal overhaul to address this shift — such as Connecticut Rep. John B. Larson, Michigan Rep. Bart Stupak and Maryland Rep. Chris Van Hollen — are expected to make their case before the Agriculture panel later this week. Other witnesses could include consumer groups, institutional investors and representatives from some of the industries hurt by rising fuel costs, such as trucking, farming and airlines.

Van Hollen, who chairs the party’s campaign committee in the House, introduced legislation last month with Rep. Rosa DeLauro (D-Conn.) and others that would require foreign derivatives markets that trade domestically to observe U.S. laws. Many of these markets now trade in American products, but outside the oversight of the CFTC. Van Hollen and DeLauro’s bill would also limit swaps that occur outside the jurisdiction of federal regulators.

Other proposals would require commodity traders to back up their investments with a higher percentage of cash in order to limit the amount of borrowed money they use, or would simply block institutional investors from certain commodity markets. In June, Sen. Joseph I. Lieberman (I-Conn.) floated a proposal to bar large pension funds from investing in energy and agricultural commodities.

But Peterson, for one, has been reluctant to embrace any of these suggestions. And congressional Republicans remain largely uncommitted on the issue, giving more conservative Democrats a chance to dig in their heels.

In the meantime, the CFTC is drawing more fire from Capitol Hill.

In testimony last month before the House, Lukken downplayed the impact these traders are having on the price of oil. During the same hearing, he said it was “imperative” that lawmakers give the agency more money to expand its staff in order to track these ever-expanding markets. Federal regulators are also concerned that legislation approved by the House last month could provoke a series of lawsuits against the government for meddling in the markets.

Although the polling suggests that voters may be receptive to a crack down on speculators, the issue may not be the bull’s-eye that some Democrats are hoping — in part because Republicans have reluctantly embraced some of the Democrats’ initial reforms.

For example, the House overwhelmingly approved the emergency powers bill for the CFTC before members left town, and Senate Republicans included modest new controls on these commodities traders in their own energy package — a package that was heavy on domestic drilling initiatives but also included provisions to encourage conservation.

However, the GOP’s support for increased oversight in these speculation markets could fade away if the Bush administration takes a hard line against whatever legislation the Democrats end up supporting.

Readers' Comments (174)

Liberals have blocked nuclear plants that would have significantly cut America's fossil fuel emmissions for the past 25 years. Liberals have blocked drilling for oil and natural gas contributing significantly to our current shortages. Liberal Democrats want to blame everyone but themselves for America's energy woes.... when in fact... they are the only people who deserve blame. Liberal Democrats have been at the forefront of bio fuels that have proven to be a colossal failure (as we predicted).

Wake up America ... Liberal Democrats are the only problem.

If America votes on this issue alone in November, our oil, gas and electricity costs will drop significantly.

I personnally want to thank clinton, peloski, reid, scummer, kennedy, kerry,cant well, murray, obabyh and the rest of the democrats that have fought to tear down this great nation by refusing to believe in capitalism and an energy policy that protects and serves this nation. you have tried to stop development of our natural resources at every corner. now we manage our forests for forest fires instead production. you think we should spent billions drilling dry holes instead of where the most oil is. we have blackouts every year and I think about all the nuclear plants that went bankrupt and are sitting idle or imploded. what in the heck are you senators and congressman thinking. we can only thank the democrats for the high gasoline, electrical, telephone, cable tv by their manipulation of our laws. i will thank you in november.

Is this some sort of joke? The democrats have been bought and paid for by socialists/environmental wackos decades ago, and along with a bunch of spineless republicans, have prevented drilling for natural resources in our own country, and now we are all paying for it. If this country elected officials who really cared, who honestly knew what it was like to live paycheck to paycheck, this country would not be in this type of high fuel cost situation. But instead we elect a bunch of elitists who only look out for themselves, and are way too willing to blame someone else for their mistakes, ie. ethanol fiasco. When will we learn?

(Democrats) have blocked drilling for oil and natural gas contributing significantly to our current shortages.

Not even McSame claims that... the HIGHEST I have ever heard anyone talk about posible domestic production increase is about 2%... A drop in the bucket five to ten years out... so why won't the arabs just cut back an equivalent to our 2% and we are back to square one? The arab nations hate these high oil prices right? OH, BTW JOHN MCCAIN VOTED WITH THE MAJORITY TO BLOCK DRILLING IN ENVIRONMENTALLY SENSITIVE AREAS! Check out what then Republican Majority leaderTom "The Hammer" DeLay had to say about the vote!( http://www.youtube.com/watch?v... )

while i am no fan of the speculation market in reguards to oil, this is a easy scapegoat for the ole dems. the question of who is paying the speculators...who owns the trading firms etc that drive up the oil market everytime a saudi prince sneezes?.

dems are not interested in following through the speculation racket any further...especially publicly because they wont like what they find. ( btw this would be a good story for some reporter)

I personnally want to thank clinton, peloski, reid, scummer, kennedy, kerry,cant well, murray, obabyh and the rest of the democrats that have fought to tear down this great nation by refusing to believe in capitalism

They are socialists as their master George Soros has ordered them to be. Of course they are anti-capitalism, their master has declared it evil and the will of their master is all that means anything to them.

It's the Obama led "Culture of Obstruction" that's causing gas prices to remain high. If we sent a signal to the market we were serious about producing our own oil,prices would drop. If in fact we are 4% of the world's population and consume 25% of it's oil then we shouldn't we be contributing our own? Not only that it's foolish policy to be sending so much of our money overseas for energy. That plus the fact that the US gets an off the top royality on it's land leases would put more money in the treasury,not to mention the additional revenues paid by workers on the new wells....Obviously people have rejected "Big Oil" being the culprit in hight gas costs,so the Dems found another villian. Of course investors are going to invest in "need" products during tough times.that theory has been around for many decades. Maybe one of the reasons the stack market is crashing is people are bailing before they get hit with Obama's new surcharges on capital gains?

Anyone who buys stocks are speculators - this is a placebo. Amazing how easy democrats believe anything that is shoveled their way. I am very disappointed and find myself leaning more and more right daily. I totally disagree with the direction the Democrats want to take this country in. McCain needs to focus on the accomplishments that the democratic congress has had in the past 2 years - of which they can claim NONE! 2 years in control of the congress and nothing to show.

?Oil speculators are making money by betting against the American consumers at the pump,? House Speaker Nancy Pelosi (D-Calif.) said before the Independence Day recess. "...............Either our 110th Do Nothing Democrat Congress is either "clueless" or simply "corrupt", probably both. Our energy situation is a "SUPPLY" issue. Of course Oil speculators are driving up the price of oil and that's because we have a "supply" issue that's only to get "worse" as time goes on UNLESS we take action to calm the markets and finally decide to start drilling domestically here in the states again. The Democrats and their "big donors" the Environmentalist's are why we are in this situation today. We need to "push" both of them out of the way on the night of November 4th, 2008........................

Your know the environmentalist's have been big donors to the Demcrat Party for decades now.

When they contribute 10's millions of dollars in donations they expect something in return.

They expect "favors" from these elected officials, Democrats. The Dem politicians "already know how they have to vote" wthen the issue of "developing domestic" sources of energy come up for votes in Congress.

It's really ashame our "free left-wing" press can't do their job and report this conncection and link that has now cause major suffering for millions of Americans and other people around the world.

As President Bush is likely to return this time from G8 summit more popular around the world and with the G8 Leaders what should we make of "wholesale changing" not to be confused with any "refining" by Obama? It is all about saving the polar bears though so let us realize how responsible Al Gore is for "speculation" related to carbon outputs. With all of Obama's radical changing of "message" (not just organization as with McCain) should not Pelosi and Reid be fearing contests with local Republican and independent thinkers in even their own wards? Obama's current presentation seems somehow to havee become more about choosing which "pants suit" to wear each morning and how Bill will feel about such. If Obama switches appearance any more in such direction might we here one of Al Gore's old quotes repeated for just the next generation of Bushs past 41?>> Are we hearing Obama come close to saying: "Bush, deserves a (third) term"? Can we though get past mere speculation about Bill and Hillary and finally proceed to "vetting" Clintons with the full review of donor lists and White House papers? Where was the Clinton "Saddam is refusing full compliance" we should increase and not cut defense spending, we should buy body armor and humvee armoring, and we should come up with an exit plan? Are there Hillary papers saying "no Bill we won't be able to cut enough defense spending if we plan for our future." So, speculation? or coincidence that Obama's changing to not "believe" but just "unite for hope" happened near immediately after getting commitments from Bill and Hillary big money people? Where are the grassroots Republicans of America's future, are they organizing on their own ambitions in Pelosi and Reid wards?

Of course the neocoms have to blame others for high gas prices, the direct result of Dem obstructionism. If we allow them to continue, and even elect the Marxist Messiah to the presidency, we are headed for economic disaster.

Amazing how easy democrats believe anything that is shoveled their way. I am very disappointed and find myself leaning more and more right daily. I totally disagree with the direction the Democrats want to take this country in.

Neocon Republicans who post here are misinformed and frankly speaking, they are ideological stooges who really don't do much research into the evidence for their claims. Whatever Rush Limbaugh says, his Dittohead thralls believe it to be true.